International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395 -0056
Volume: 04 Issue: 03 | Mar -2017
p-ISSN: 2395-0072
www.irjet.net
BlockChain Technology Centralised Ledger to Distributed Ledger Greeshma R Nair1, Shoney Sebastian2 1Department
of Computer Science, Christ University, Bangalore Department of Computer Science, Christ University, Bangalore ---------------------------------------------------------------------***--------------------------------------------------------------------2
Abstract - This paper talks about block chain technology and its working principle. The paper is drafted to create an understanding of the blockchain technology and how it is different from the currently used centralized transactions systems. The paper also describes the advantages of block chain and various evaluation techniques.
Most of the organisations uses a Centralised ledger system to record all day to day transactions. A centralised ledger system is a compilation of all transactions which is controlled by a single entity i.e. it has a single point of control. For example : In – case of bank transactions which are posted on a centralised system if the controlling entity shuts down abruptly , all transactions will be terminated and cannot be processed. This can lead to miss-representation of transactions in the bank statement [2]. This will affect all of the bank’s clients. Also, if the bank has any intentions of forgery, they can take away all the money and can cause serious financial impact to all its clients. In centralized ledger system internal and external reconciliation of data is required to ensure the integrity of transactions. The centralized system provides no restrictions on the operations which can be performed in the ledger. For example: Any user can modify a transaction and back date them. This can lead is misstatement of financial transactions and fraudulent activities. To avoid such transactional errors a decentralized system or a distributed ledger can be introduced [3].
Key Words: Block chain technology , Bit Coin , Block Chain Evaluation , Fintech , Distibuted Ledger , Centralized Ledger.
1. INTRODUCTION A blockchain is defined as a public space including all Bitcoin transactions that have been made until the current transaction or the last transaction. As finished blocks are enclosed to it as and when the transactions are complete, the blockchain is becoming bigger and bigger. These blocks are coming into the blockchain following a chronological order, in a linear way. The computers which are part of the Bitcoin network are called nodes. All of these nodes receive a copy of the blockchain, this taking place automatically when a client joins the Bitcoin network. There is a lot of information included in the blockchain, for example the addresses and their balances from the beginning until the newest completed block.
The diagram below shows the workflow of a centralized system:
1.1 Current state of transactional ledgers Accounting system and its digitalisation have not yet attained maturity compared to other industries .Few reasons may be due the very high involvement of regulators. The accounting details of an organisation must meet all regulatory requirements in order to retain the validity and integrity of all transactions. Organisation needs to be very careful in developing new ledger systems to ensure very high security and prevent any fraudulent activities. In order to achieve this, many transaction are still manually processed and verified, which has affected the day to day operations. Most of these manual tasks are not automated at all and doesn’t seem to be automated in the near future so as to maintain the integrity and validity of transactions [1].
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Fig.1 Centralized Systems
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